All indications point to an oil supply surplus in the first quarter of 2022, said UAE Energy Minister Suhail al-Mazrouei, who also predicted that OPEC+ would likely continue its current production policy when it meets in early December.
OPEC and its allies agreed earlier this month to continue with its plans to increase oil output by 400,000 barrels per day (bpd) starting in December, despite US calls for more supply to calm rising prices.
"All of the data shows us that in Q1 we will have a surplus of supply compared to demand," Mazrouei said.
OPEC's leading producer Saudi Arabia has dismissed calls from OPEC+ for faster oil production increases, citing economic headwinds.
"We care about the producing countries, and we don't want global economic growth to stagnate," Mazrouei said. "However, we cannot simply pump more when there is no technical reason to do so. We are a technical organisation and will not make political decisions."
OPEC+ supply restraint has fuelled a rally that has lifted global benchmark Brent crude to three-year highs, but oil markets have fallen as the dollar strengthens and speculation mounts that the US would release oil from its strategic reserves to lower prices.
"Next year will be a year of balance, with a supply surplus most likely. We will have enough oil, and some supply will come from the US, primarily from shale oil producers" he stated.
The UAE's present oil production capacity is more than four million bpd, but the Gulf nation aims to boost that to five million bpd by 2030, he added.